Supply Chain Archives | Page 77 of 91

Ports under post-Brexit pressure

Jan 13, 2022 | Brexit, Customs, EU, Supply Chain

The 1st January 2022 changes to UK border policies, with the imposition of customs declaration for imports from the EU, got off to the rockiest of starts when the new supporting IT system, the Goods Vehicle Movement Service (GVMS), crashed on day one, with trucks stuck at Calais for four days.

While HMRC were quick to restore the crashed GVMS system, the pressure on EU/UK supply chains is likely to intensify as volumes rise after the Christmas lull, with additional delays tied to Goods Movement Reference (GMR) production, which is required before trucks can enter the loading port. Truck drivers have reported queues of up to eight hours trying to get through customs controls at the French port of Calais.

We are uncertain why other forwarders’ GMRs are not being produced in a timely manner and not always correct, as we do not see the new regulations as too arduous. The process is the same, it’s mainly just the time frame which has changed.

Make UK, the industry body representing 20,000 manufacturing firms, said that while optimism among its members had grown, it was being undermined by the after-effects of the UK’s departure from the EU.

One year on from the end of the transition period and the majority of firms in a Make UK/PwC senior executive survey said Brexit had moderately or significantly hampered their business, with over half warning they were likely to suffer further damage this year from customs delays, new red tape and changes to product labelling.

Brexit disruption remains among the biggest concerns facing industry bosses for the year ahead as Britain’s departure from the EU complicates the fallout from COVID-19 and the multitude of rising costs facing companies.

Delays at customs, the additional costs from meeting separate regulatory regimes in the UK and the EU, and reduced access to migrant workers were among top concerns raised in the survey, while on a more positive note three-quarters of companies expected conditions in manufacturing to improve over the coming year.

According to analysis by the Centre for Economics and Business Research, business optimism and output growth fell in December as firms grappled with the fallout from the latest wave of COVID infections.

However, most companies said they believed business conditions would improve, with about 73% believing that opportunities outweighed the risks, while in a separate survey of chief financial officers, a record 37% were planning on increasing capital investment in the next year, on new products, services, or markets.

Metro are at the forefront of delivering unique customs brokerage solutions, designed and developed in-house, with automation and a global team of more than 40 people dedicated to the platform. We can ensure that products move from A to B to Z seamlessly under the correct protocol and with complete visibility.

We believe that importers should have no fear of customs delays, or new red tape hampering their supply chain operations.

Our CuDoS customs brokerage platform automates and submits customs declarations, simplifying compliant UK/EU border processing and safeguarding our customers’ European supply chains.

We have a dedicated team of customs experts who support our customers through easement and regime changes and ensure that their EU/UK movements flow smoothly across the border, in full compliance with all controls.

To discuss your situation and to learn how we automate customs declarations for businesses of all sizes, please contact Elliot Carlile or Andy Fitchett who can talk you through the options.

We currently have capacity within our brokerage business unit due to further huge investment in 2021, in personnel and our CuDoS platform, which positions us at the forefront of the market. We can deal with any challenges and encourage all new enquiries relating to customs requirements during the current period.

UK government funds 11,000 new HGV drivers

Jan 13, 2022 | EU, Road, Supply Chain

HGV driver numbers have shrunk by a quarter since 2019, creating a supply chain crisis that has accelerated post-Brexit, with an estimated shortage of between 40,000 and 100,000 lorry drivers, leaving gaps on shelves and triggering October’s petrol crisis.

Transport within the UK, Europe and on a global basis has been very high profile over recent years with resource shortages on every continent, which has impacted supply chains from start to finish, with hurdles at the first and final mile. Hopefully there is now some positive development within the UK. The next industry issue to overcome will be to ensure that there are enough new lorries available for the trained drivers, which are currently taking up to a year to be manufactured and delivered after ordering, due to component difficulties within the automotive sector.

The UK government has offered contracts worth £34.5m to train up to 11,000 new lorry drivers, to alleviate the ongoing supply chain squeeze caused by the pandemic and Brexit.

The government’s one-year investment amounts to more than it spent on HGV driver training over the previous eight years combined and is seen as necessary because low profit margins and endemic poaching of drivers has not incentivised the industry to invest in training, which costs approximately £4,000 per driver.

Training providers said that early indications were that rising wages and a growing public understanding of the importance of logistics professionals was encouraging people into the industry, with one Manchester-based training company receiving 4,000 applications since launching in December.

Training providers are also offering 50,000 drivers who held HGV licences but were not using them two to four-week courses to enable them to reactivate their licences and benefit from wages that can reach up to £70,000 a year in some sectors.

The problem for employers in investing in training a driver, is the chances are that that driver is going to get up and leave when offered a higher wage, which makes it very difficult to get a return on their training investment and why public funding is needed.

The number of lorry drivers fell by nearly a quarter during the pandemic, with the number of EU drivers down by one-third and many older British drivers retiring, with 308,000 drivers in the second quarter of 2019 down to 236,000 two years later.

Wages have risen 8% over the same period, to an average of £13.08 an hour, with average earnings for a driver now £35,000-£40,000 a year, which will help attract a new generation to an industry where the average age of drivers is over 50.

There is hope that the government will sustain its investment beyond the current round, which will run until the end of November, with an option to continue for a second year.

The Department for Education is keen to push the courses and get more adults to take advantage of the free courses and get on the path to well-paid careers.

We work with a number of selected long-term haulage partners across the UK to give us access to the widest pool of equipment and driver resource at the UK’s primary container ports, to offer cost-effective and efficient merchant haulage services.

We also operate, within the group, one of the UK’s largest container hauliers and we are at the forefront of encouraging people into the industry and investing huge amounts in ensuring that we deliver customers goods at the right time and at the right cost.

To learn more or discuss your situation, please contact Elliot Carlile or Simon Balfe, who leads our UK multimodal transport operations, to talk you through the options.

2021; a year of supply chain challenges

Dec 21, 2021 | Air, Brexit, China, EU, Metro, Road, Sea, Sea/Air, Supply Chain

All around the world, companies have been impacted by supply chain challenges in 2021. With the pandemic’s disruption exacerbated by ‘Black Swan events', from Brexit, to the Suez Canal blockage, we have been working tirelessly to help our customers overcome these challenges and share critical information, so that they are always informed of what lies ahead.

Ensuring the right product is available for delivery, to the right customer, at the right time, in the right quantity and in the right condition becomes increasingly difficult when supply chains are pressured and unforeseen events impact operations.

To keep our customers and followers informed during 2021 we have been approached for our opinions regularly by the trade and national press, contributed to countless articles and shared breaking supply chain news, guides and insights, including:

40 supply chain bulletins, to a combined audience of 32,000
200 news updates on our web site attracting >100K page views
1000+ social media posts, reaching over a quarter of a million users

Our first bulletin of 2021 highlighted early Brexit-related issues and outlined the rates, vessel space and equipment availability challenges that lay ahead.

A few bulletins in and we were considering the supply chain impact of the UK’s vaccine programme and, in preparation for the anticipated volume increases, were adding new personnel in key operational departments.

US port operations, particularly on the West Coast began to buckle under relentless volumes in early March, while European, North American and UK ports were anticipating a lull after the Evergreen EverGiven blocked the Suez Canal for six days, from the 23rd March.

Lockdowns continued to ripple across Asia from April and container equipment shortages really began to bite, exacerbated by the ‘Suez Effect’, driving desperate shippers to move urgent cargo to air freight, with massive rate increases impacting many trade lanes and Metro’s Sea/Air services proving very popular with increasing numbers of smarter shippers.

May; and the same week we’re urging shippers to start planning their Christmas shipping schedules, the key Chinese port of Yantian stops accepting containers, after a coronavirus outbreak in the port area. Within weeks and the impact of the port’s closure has spread way beyond southern China, with carriers recording their worst ever transit times and rates at historic highs - 1,000% higher than 2020!

News of the heavy goods vehicle (HGV) driver shortage made mainstream news in June and Yantian finally opened, though Ningbo was to close just weeks later, after a single port worker tested positive for COVID-19, contributing to further sea freight rates increases, pushing increasing quantities of ‘distressed’ ocean cargo to air freight.

Throughout the year, while air freight has been uncertain, it has proven stable in comparison to shipping, with airlines being reactive and agile, switching on flights quickly to meet demand, where they have perceived a reasonable return on the investment and we have been ready to add charter capacity, to ensure that our customers’ expectations are met and delivery deadlines achieved.

Into the 3rd quarter and vessel space and the container equipment crunch continues, with market demand exceeding supply and rates skyrocketing. HGV drivers are considering strikes for better conditions, while demand for haulage is more than twice the 2019 level and 70% of hauliers are concerned about EU border checks due to come into force at the beginning of next year.

Metro’s technology team, meanwhile, have been integrating HMRC’s Customs Declaration Service (CDS), which will serve as the UK’s single customs platform, with our market-leading MVT supply chain platform and the CuDoS system, which automates and submits customs declarations in line with HMRC and EU regimes.

Our team also supported the development and adoption of emerging technology, across the shipping industry, by participating in the successful testing of new e-Bill of Lading (eFBL) standards, with FIATA , the trade association for 40,000 freight forwarding and logistics firms in 150 countries.

The final quarter of 2021 and the HGV driver shortage is intensified by further losses to the retail sector, factories in China are forced to close, due to power shortages, container carrier reliability drops to all-time lows, with ports subsequently omitted, to try and restore schedules.

Passenger airlines finally begin to convert and reduce the number of aircraft operated in ‘preighter’ configurations and return to flying scheduled passenger services on European, transatlantic and long-haul routes.

As the year draws to a close, experts warn that the UK may run out of warehouse space, many shippers are still not ready for full UK border controls, manufacturing costs reach a three decade high, Omicron makes its debut and we share some Critical Christmas considerations.

This year we have also welcomed 60 new colleagues, to our Birmingham HQ and expanded our operations and platforms significantly, to ensure we deliver continued excellence, proactive communication and essential planning to customers. It’s what we do, to ensure we remain at the forefront of the industry, leading the evolution of freight and the dynamic solutions that benefit your supply chains.

However this year ends and whatever next year brings, you can rest assured that we will be available and ready to keep your supply chain running. Let’s keep talking and evolving as partners in an unpredictable environment and world. You are in safe hands!

Thank you for your support, Merry Christmas and Happy New Year.

Freight market report – December 2021

Dec 16, 2021 | Air, Rail, Sea, Sea/Air, Supply Chain

With supply chains battling through overwhelmed transport systems, material shortages, and infrastructure disruptions for close on two years, we asked our partners in seven key markets to share their thoughts on critical operational elements, including demand, capacity and rates.

AIR

In most regions airports are operating normally, or are improving, though there is uncertainty about the impact of Omicron and there are backlogs and operational challenges at Indian hubs.

Shanghai is a notable exception, with strict quarantine regulations in place for ground handling since September, restricting number of flights flown and the airport’s operational capability, which has been massively exacerbated by a PPE and test-kit peak lasting till early November.

Continuing congestion at key European and US gateways are highlighted as a particular issue by the origins and in the UK there is limited handling capacity in BHX, GLA, NCL, LHR and MAN, though clearances are being done on time.

While no new capacity has been added, most origins noted the resumption of passenger flights, but the return of belly-hold space for passenger luggage has been at the expense of cargo capacity.

Freighters are operating from all origins, but at many they are ‘Preighter’ conversions and from China - and particularly Shanghai - are almost exclusively committed to eCommerce and rapid-test kit cargo.

Perhaps unsurprisingly rates ex Shanghai are soaring, with increases of 10-15% in the last week.

Rates from Sri Lanka have softened, but are expected to harden, bringing them into line with every other major trade route.

SEA / AIR

It is worth highlighting the situation at Dubai, where airports are operating to 90% capacity, with efficient handling and no delays.

The air freight market is particularly buoyant, with no sign of the peak season slowing and multiple carriers serving airports across Europe and the UK, with scheduled flights, including a new gateway at London Gatwick.

The high yield to US destinations is encouraging many direct carriers to divert services away from Europe to serve trans-Pacific routes, which is hugely increasing the popularity of our Sea Air and Air to air options via SIN / CMB / DXB /AUH/ DOH for shippers seeking more economical options.

OCEAN

The availability of equipment, which has been such a problem for 12 months or so, has been improving at many origins, though India, Sri Lanka and Bangladesh prefer some time to position specific equipment and Dubai need advance notice of bulk shipments of ten containers, or more.

Transhipment ports in Asia are facing some delays, with Singapore and India ports experiencing berthing delays of two days and Sri Lanka three to four days.

Earlier in the year the US ports of Los Angeles/Long Beach had 25-30 vessels waiting in the harbour and today there is approximately 80-90, with the East Coast (NYC, SAV, MIA) seeing between 20-40 vessels.

With port operations elsewhere largely improving, we would hope to see carrier schedule reliability follow suit, but nothing can be taken for granted.

Demand from China is still high and carriers are keeping rates high, as they are expecting demand to stay strong till Lunar New Year and we can only expect rate levels to reduce should there be a drop in demand.

From other origins demand varies, but is consistently strong enough to keep rates elevated and the lines deferring contracts in favour of FAK spot rates.

RAIL

Despite the launch of new services and routes, and plans to modernise infrastructure, rail services from Asia have been increasingly overwhelmed by volumes, suffering catastrophic congestion and delays at key points.

The only SE Asian origin that has a potential rail freight service to Europe is from Vietnam (Hanoi/Haiphong) but that service is so oversubscribed, due to very limited capacity, that we would not consider it a viable option.

In summary, inflated prices and transit times that have doubled (35 days + 7 to 14 days for transfer to UK), due to congestion everywhere, mean that rail is taking as long as sea freight and costing considerably more. It is not worth considering at this time.

The supply chain impact of Omicron is still to be felt, which is why we continue to monitor the emerging situation closely with our network partners.

We will share important news and developments, often before it is in the public domain, so that you can make informed decisions and protect your supply chain.

For further information, or to discuss any particular concerns, please contact Elliot Carlile or Grant Liddell.

Metro will always provide you with the best alternatives and options, supported by a proactive team, leading-edge technology and open communication. Supply chain solutions that are designed around you, your situation and needs.